This audio is generated automatically. Please let me know if you have any comments.
Diving overview:
- Lifeway Foods’ board said Danone’s $27 per share offer “significantly underestimates” the value of the business, but the maker of kefir and fermented probiotic products has no “opposition to a sale of the company at any price.”
- The board said Lifeway “has strong potential to deliver superior value to all shareholders compared to Danone’s revised offer.” Danone declined to comment.
- Danone on November 15 increased its offer to buy the remaining shares it did not already own in Lifeway. The dairy giant previously offered $25 per share in September. Danone currently owns 23.3% of Lifeway’s common stock.
Dive Insights:
Lifeway’s admission that it is at least willing to accept the offer is likely a negotiating ploy to elicit a higher bid from Danone or another unnamed party. Lifeway spends much of its latest press release commenting on the proposed acquisition while also pointing out recent successes and the company’s future prospects.
Lifeway’s board said it had recorded revenue growth for the 20th consecutive fiscal quarter compared to the previous year, with revenue increasing from $94 million in 2019 to $160 million a year ago. The company also noted that its double-digit growth has outpaced much of its dairy and food segment and that its products are benefiting from consumer interest in gut health, proteins and probiotics.
“As evidenced by Lifeway’s strong historical financial results, the company has maintained momentum with a runway for significant long-term growth and margin expansion,” Lifeway said in a statement. The dairy manufacturer said Danone’s $27 per share bid was too low, even before considering the significant synergies and additional operating efficiencies that Danone (or another strategic acquirer) could realize.
The takeover bid comes as Lifeway is embroiled in a bitter family dispute between the CEO and her relatives. Edward and Ludmila Smolyansky, the brother and mother of Lifeway CEO Julie Smolyansky, last week called for the company to create an independent special committee to evaluate and negotiate a deal with Danone or another potential buyer. Family members described “serious personal conflicts that call into question the CEO’s ability to fairly evaluate Danone’s proposal in accordance with his fiduciary duties.”
